Buying a Home After Bankruptcy

February 20, 2017

Bankruptcy is a complicated topic for most people, which is why people in debt are looking for a law office near me. Many people don’t understand bankruptcy, or feel that they will no longer have any options once bankruptcy is declared. One of the biggest concerns many have is that they will be unable to buy a home. The reality is, if you owe an excessive amount of money that you are unable to pay, buying a home will be difficult whether you declare bankruptcy or not. It isn’t, however, impossible to buy a home after bankruptcy. Here are the first steps to buying a home if you’ve declared bankruptcy in the past.

If I Declare Bankruptcy at a Law Office Near Me, When Can I Buy a House?

Step One: Check Your Credit Score

In order to know where you are going, you need to know where you are at. Keeping track of your credit score will help you to track your progress along the way. Take note of your original credit score after you file for bankruptcy, and use it as a motivational tool and measurement of progress. Lenders may also be able to tell you where your score needs to be to qualify for a loan.

Step Two: Set a Down Payment Goal

Professionals recommend a down payment of 20% when you buy a home. Take a look at homes in your area and figure out what that would be. Then, discuss your situation with a financial advisor or your local bank manager to come up with a savings strategy for making the down payment.

Step Three: Calculate

Sit down and figure out exactly how much you can afford to pay for a home. Include utilities, groceries, and other expenses into your budget so that you can be sure to have a realistic idea of your budget.

Step Four: Wait

Waiting is not only probably necessary to improve your standing and make your down payment, it’s also responsible. You will want to make sure that you are sticking to your financial goals and making responsible decisions before you commit to another large payment.

It takes up to ten years for bankruptcy to be removed from your account. However, you will not need to wait this long before buying your home. A year or two will make a big difference and will allow you to properly save and plan for the additional expenses. Make sure you consult with multiple lenders so that you can get a competitive rate and find a lender that is willing to work with you.